Accord Is Reached In Nazi Loot Case

A Chicago art collector and the grandson of a German Jewish refugee have reached an agreement that settles lawsuits over the ownership of Pablo Picasso’s 1922 Femme en blanc (Woman in White), which had been confiscated by the Nazis 65 years ago in Paris and sold 35 years later by an art dealer in New

NEW YORK—A Chicago art collector and the grandson of a German Jewish refugee have reached an agreement that settles lawsuits over the ownership of Pablo Picasso’s 1922 Femme en blanc (Woman in White), which had been confiscated by the Nazis 65 years ago in Paris and sold 35 years later by an art dealer in New York.

Chicago philanthropist Marilynn Alsdorf agreed to pay Thomas Bennigson of Oakland, Calif., $6.5 million, ending three years of litigation in federal and California state courts over the painting. Once the settlement is final, Alsdorf will have incontestable title, according to attorneys for the litigants.

Bennigson sought the painting, worth an estimated $10 million, on grounds that it belonged to his family. It was stolen in 1940 from the Paris home of art dealer Justin Thannhauser, to whom Bennigson’s grandmother Carlota Landsberg had sent the work for safekeeping when she fled Berlin after Kristallnacht in 1938.

Alsdorf maintains that she and her late husband, James, who paid about $350,000 for Femme en blanc in 1975, bought the work in good faith and with proper legal title. However, Alsdorf, 80, agreed to the settlement to remove the cloud over the painting. “The settlement is designed to clear Mrs. Alsdorf’s title, and it will accomplish that,” her attorney David Rownd, of FagelHaber, Chicago, told ARTnewsletter.

The provenance of the painting was investigated by the Art Loss Register at the request of a European dealer, who had seen it in a Los Angeles gallery in 2001 and expressed interest in buying it. The Register, a private international database of lost and stolen art that was created by auction houses and insurance companies, found the painting in a French listing of World War II–era looted artworks. “That raised a red flag with us,” says Sarah Jackson, director of historic claims at the Register.

In a Berlin archive, Jackson found a letter from dealer Thannhauser referring to the theft of the Picasso he had been storing for Landsberg. “Once we had the clue that this picture had the provenance name of Landsberg in it, we had to identify who Carlota Landsberg was,” Jackson said in a phone interview from her London office.

Landsberg had died in New York in 1994, and Bennigson was unaware of the Picasso until the Register contacted him in 2002. He filed the first lawsuit later that year in California; Alsdorf subsequently filed a challenge in federal court in Illinois. Those suits dealt with jurisdictional issues, not ownership.

In October 2004 the FBI took custody of the painting, contending that it had been unlawfully shipped from California back to Chicago. The Picasso was “subject to forfeiture to the United States as property traceable to unlawful activity in that it was transported in interstate commerce with knowledge that it was stolen,” the FBI said in a statement at the time. Because the settlement resolves the question of ownership, it also resolves the case of the federal government.

Said attorney E. Randol Schoenberg, of Burris & Schoenberg, Los Angeles, who represented Bennigson: “The settlement confirms once again the law in the U.S.—that the original owner gets to recover the painting and that people who fight that end up wasting their money.”

In a related matter, Bennigson reached a settlement in July with Stephen Hahn, the now-retired New York art dealer who purchased the Picasso in Paris in 1975 and subsequently sold it to Alsdorf. Under that settlement, which concluded an action filed in superior court in Santa Barbara, Calif., Hahn will pay Bennigson an undisclosed amount that approximates the dealer’s profit on the original sale. Alsdorf has agreed not to bring action against Hahn, affirmed Rownd.

The settlement leaves unresolved a conflict between American and European laws concerning legal title. Alsdorf’s attorney Rownd contends that when Hahn acquired the painting in Paris, he acquired valid title under French law: “The allegation which has been made is that somehow that valid title evaporated by virtue of the fact that he brought the painting to New York and subsequently sold it to Mrs. Alsdorf. When valid title attaches in France, the fact that the painting travels over the ocean to the United States doesn’t make that valid title go away.”